You have been asked to calculate the Return on Investment (ROI) for a project whose development will be accomplished dur

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You have been asked to calculate the
Return on Investment (ROI) for a project whose development will be
accomplished during a single calendar year with the go-live date of
Jan 1st The project, to
develop a new Web-based ordering and fulfillment system, has
already been conceptualized, and the team has provided estimates
and a partial resource plan. Labor Operating expenses in years 2
through 5 are projected to be $55,000 annually. Miscellaneous
expenses in years 2 through 5 are projected to be $6,000 annually.
The benefit is projected to be $275,000 the first year of
operation, increasing 7% each year. Hardware cost that would be
installed for development is $100,000. You’ll need to complete the
resource plan, the 5 year planning sheet, and calculate a 5 year
ROI. Please finish filling out these tables and
answer the associated questions.
Development Team
Quantity
$/hour
Hours/each resource
Total Hours
Total Dollars
Program Director
1
125
500
Project Manager
1
110
1000
BA
1
110
800
Development Lead
1
90
1000
QA Lead
1
90
1000
Off-Shore Developers
5
45
800
Off-Shore QA
4
45
800
Total
Expense
Year 1
Year 2
Year 3
Year 4
Year 5
Labor
Hardware
Misc
Benefit
Year 1
Year 2
Year 3
Year 4
Year 5
Benefit
Question 1 [2 points]: What is the total labor
cost of development? What is the total
expense of this project projected to be for the first 5 year
period? What is the total benefit projected to be for the
first year? What is the total benefit projected to be for the
first five years? Given ROI % = ((Benefit – Cost) / Cost)*100,
what is the 5 year ROI for this project? If the company could
just put the money to cover the project expenses in the bank
(instead of doing this project) it could make an investment gain of
5% (total) over this same 5 year period. Should the company
invest in this project, or put the money in the bank?
Why?